By Chad Hemenway, Advisen
Once again, premiums for commercial property/casualty insurance lines increased in the second quarter 2021, led by 25.5% jump in Cyber and a 17.4% uptick in Umbrella premiums.
According to The Council of Insurance Agents & Brokers’ Commercial Property/Casualty Market Index, the second quarter marked the 15th consecutive quarter of U.S. commercial P/C premium increases – 8.3% across all-sized accounts.
According to respondents of the CIAB survey, increases in all line of business again moderated, but for Cyber.
“Carriers continued to approach writing cyber risk with caution in Q2 2021,” said Ken A. Crerar, president and CEO of The Council. The surge in Q2 Cyber premiums follows increases of 18% in Q1 and about 11% in Q4 2020.
A rise in frequency and severity – driven by ransomware – as well as poor risk management procedures and employee training related to this type of cyberattack, are to blame for premium increases, said respondents. Carriers also mentioned a “more stringent state/federal/international regulatory environment” and “social engineering and increased litigation costs” to explain the increases, respondents added.
Cyber insurance carriers continue to reduce limits and increase retentions while focusing on underwriting scrutiny – the latter being a common theme in all lines of business during Q2.
Other than Cyber and Umbrella, D&O was the only line of business with premium increases of more than 10% in Q2, at 13.4%. The Q2 increase of 17.4% in Umbrella was down from 19.7% in Q1 but respondents said capacity for Excess Umbrella continues to fall, requiring more insurers to build a tower of coverage.
“Excess liability increases continued and capacity was very low,” said one respondent. “Social inflation was our new world.”
Managing Editor Chad Hemenway can be reached at [email protected]